E-Trade vs. TD Ameritrade

E-Trade and TD Ameritrade often top the pile of online brokers, making it tough for investors to decide between the two. They both appeal to a range of investors — from beginners to frequent and advanced traders — and charge similar fees and commissions.

If you’re stuck going back and forth between E-Trade and TD Ameritrade, we’ve made your pros and cons list with our head-to-head comparison.

Cash bonuses ranging from $100 (for deposits of $25,000 to $99,999), to $600 (for deposits of $250,000 or more)

Fees and commissions

You won’t pay inactivity or annual fees at either broker. As for commissions, many investors will pay the same at both: $6.95 per trade. E-Trade, however, offers a tiered commission schedule that reduces costs for high-volume traders: Investors who trade at least 30 times per quarter qualify for reduced commissions of $4.95. If you’re likely to qualify for that discount, you’ll save money in commissions with E-Trade.

E-Trade’s tiered commission schedule also applies to options trades, which means high-volume options traders will benefit from that reduced per-trade commission charge and a lower contract fee of 50 cents. The standard per-contract charge of 75 cents is the same at both brokers.

One other thing worth noting: Mutual fund trade commissions are high at TD Ameritrade: $49.99. They’re more reasonable at E-Trade, which charges just $19.99. Both brokers have a list of no-transaction fee funds (more on this below).

Winner: E-Trade, due to its volume discounts, but traders who don’t qualify for those will incur identical costs at both brokers for stock and options trades.

Investment selection

Again, it’s pretty much a toss-up here, as both E-Trade and TD Ameritrade offer access to a wide range of investments, including futures trading. But if we dial down to specifics:

No-transaction-fee mutual funds: TD Ameritrade brings a larger number of these funds, with nearly 4,000 to E-Trade’s 2,500. (As noted above, trade costs on funds outside of that fund list are higher at TD Ameritrade.) TD Ameritrade also offers a mutual fund Premier List, compiled by Morningstar and updated quarterly, with independent recommendations in over 45 different fund categories.

Futures: E-Trade allows trading of over 200 futures products, while TD Ameritrade has just over 50. E-Trade’s per-contract fee is slightly more expensive at $2.99 to TD Ameritrade’s $2.25.

Winner: TD Ameritrade wins here, simply for its wider range of no-transaction-fee mutual funds and the availability of forex. But it’s a very close call, and futures traders will prefer E-Trade. It’s worth noting that E-Trade requires an account minimum of $10,000 to trade futures.

It’s basically akin to the advanced platforms offered by other brokers. But then TD Ameritrade takes it even further, with thinkorswim. Revamped last year, thinkorswim is professional-level: It includes comprehensive charting with hundreds of technical indicators, a Market Monitor tool that graphically displays the entire market via heat maps and graphs, Stock Hacker — which tracks down stocks headed up or down and displays information about their volatility and risk — and streaming CNBC. The platform is also packed with educational offerings, including onboarding tools (called “swim lessons”) for novice traders.

TD Ameritrade also offers mobile trading via two mobile apps, including Mobile Trader for advanced traders, with live-streaming news, full options order capabilities, in-app chat support and customization.

E-Trade was docked a star in our review because its advanced platform, E-Trade PRO, is available only to customers with at least a $250,000 balance or who execute at least 30 stock or options trades per quarter. That said, it’s an attractive option for those who qualify, with robust idea-generating tools like Strategy Scanner, backtesting, a professional-level options screener and customizable charting.

E-Trade is innovative in other areas as well. Its mobile app may be the best available from any online broker, with advanced features like stock and ETF screeners, options chain filters, educational videos, and real-time quotes, charts and CNBC Video on Demand. The company’s web platform, E-Trade Web, is designed for investors who want to take care of the basics: tracking their accounts, managing watch lists, viewing streaming data and, of course, making trades.

Both brokers offer free access to research and data, including independent research from S&P Capital IQ, Thomson Reuters, Market Edge and Morningstar. TD Ameritrade customers have access to analysis from a slightly larger number of third-party providers, as well as access to the company’s MyTrade social community and Social Signals, which pulls trading insight from Twitter. TD Ameritrade also offers paper trading so users can test strategies risk-free; E-Trade doesn’t offer virtual trading capabilities.

Winner: TD Ameritrade has to take this portion. Platforms as advanced as thinkorswim are rarely offered to all customers free of charge with no account or activity minimums, and the company’s research offerings are top-notch and innovative. Those who do a great deal of their trading on the go may prefer E-Trade, as its mobile app experience is slightly better.

Which one is right for you?

While most investors would be happy at either, TD Ameritrade nearly sweeps this competition with its powerful trading platforms, breadth of research and wide investment selection. The company shared NerdWallet’s pick for the overall best online broker for stock trading for a reason, and it easily appeals to both beginners and the most advanced traders.

Investors who choose TD Ameritrade do so knowing they’ll pay more for every trade when compared with most discount brokers. E-Trade’s commissions are similar, though the company’s volume discount may make it more favorable to frequent traders. NerdWallet’s online brokerage search tool can help you estimate your potential costs based on your trading frequency and investment preferences.

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